Correlation Between UBS ETF and UBS Fund
Can any of the company-specific risk be diversified away by investing in both UBS ETF and UBS Fund at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining UBS ETF and UBS Fund into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between UBS ETF MSCI and UBS Fund Solutions, you can compare the effects of market volatilities on UBS ETF and UBS Fund and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in UBS ETF with a short position of UBS Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of UBS ETF and UBS Fund.
Diversification Opportunities for UBS ETF and UBS Fund
Poor diversification
The 3 months correlation between UBS and UBS is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding UBS ETF MSCI and UBS Fund Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UBS Fund Solutions and UBS ETF is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on UBS ETF MSCI are associated (or correlated) with UBS Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of UBS Fund Solutions has no effect on the direction of UBS ETF i.e., UBS ETF and UBS Fund go up and down completely randomly.
Pair Corralation between UBS ETF and UBS Fund
Assuming the 90 days trading horizon UBS ETF MSCI is expected to generate 0.98 times more return on investment than UBS Fund. However, UBS ETF MSCI is 1.02 times less risky than UBS Fund. It trades about 0.05 of its potential returns per unit of risk. UBS Fund Solutions is currently generating about 0.0 per unit of risk. If you would invest 1,751 in UBS ETF MSCI on November 2, 2024 and sell it today you would earn a total of 357.00 from holding UBS ETF MSCI or generate 20.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
UBS ETF MSCI vs. UBS Fund Solutions
Performance |
| Timeline |
| UBS ETF MSCI |
| UBS Fund Solutions |
UBS ETF and UBS Fund Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with UBS ETF and UBS Fund
The main advantage of trading using opposite UBS ETF and UBS Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UBS ETF position performs unexpectedly, UBS Fund can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in UBS Fund will offset losses from the drop in UBS Fund's long position.The idea behind UBS ETF MSCI and UBS Fund Solutions pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
Other Complementary Tools
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Equity Valuation Check real value of public entities based on technical and fundamental data |